Pinchuan Ong, National University of Singapore

"Assessing Hypothetical Scenarios for Estimating Labor Supply Responses: Evidence from a Pension Reform” 

Co-authors: Nicola Fuchs-Schündeln, Jonas Jessen and Jessica Pan.

Abstract

We assess whether survey responses to hypothetical policy scenarios can recover actual labor supply responses from policy variations. We study the German Mütterrente, a pension benefit that credits parents for raising children, benchmarking against the quasi-experimental estimates of Artmann et al. (forthcoming). Surveying mothers and fathers about a hypothetical reform, we find that mothers expect to reduce their labor supply, with an implied marginal propensity to earn of −0.65 – close to the quasi-experimental estimate of −0.54. The response is sensible across subgroups, falls mainly on the extensive margin, and spills over to fathers. In the aggregate, spousal predictions match partners’ own reports.

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